Telephone and Data obtains $300 million three-year term loan

By Wendy Van Sickle

Columbus, Ohio, Oct. 2 – Telephone and Data Systems, Inc. entered into a $300 million senior secured term loan credit agreement with Wells Fargo Bank, NA as administrative agent on Sept. 28, according to an 8-K filing with the Securities and Exchange Commission.

Citibank, NA, TD Securities (USA) LLC and Wells Fargo Securities, LLC are joint lead arrangers and joint bookrunners.

The full amount was drawn at closing to be used for general corporate purposes. A portion was used to repay borrowings under the company’s existing revolver.

Financial covenants include a minimum consolidated interest coverage ratio of 3x and a maximum consolidated leverage ratio of 4.25x initially, stepping down to 4x on April 1, 2024 and to 3.75x on April 1, 2025.

Amounts borrowed will be due on the earlier of Sept. 28, 2026 and 91 days prior to the scheduled maturity date of Telephone and Data’s existing revolver, which maturity date is currently July 20, 2026, unless the revolver has been refinanced or extended to a final maturity date not earlier than Dec. 28, 2026.

Borrowings bear interest at term SOFR plus a margin that is initially 200 basis points through April 4, 2025. Starting on that date, interest will rise by 25 bps per quarter.

Telephone and Data Systems is a diversified telecommunications services company based in Chicago.

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